Probate, Property & Protecting Generational Wealth

For real estate professionals, probate is more than a legal issue. It can decide whether a family keeps a property, sells it successfully, or watches years of accumulated wealth disappear. That makes understanding the basics of probate, estate planning, heirship and title part of serving clients — while knowing exactly where the agent's role ends and the attorney's begins.

When someone dies without a plan

When an owner dies without a will or other estate-planning tool, the family may struggle to determine who owns the property and who can sell it. Multiple heirs, old liens, taxes, minor children, disagreements or relatives who can't be located can all complicate a simple family home. Until those issues are resolved, the property may not have marketable title.

Probate and the real estate transaction

Probate can establish who has legal authority to act for a deceased person's estate. The lesson for agents: don't assume the person calling you has the legal authority to sell the property. Pull the deed early. If an owner is deceased, involve the title company and determine whether legal counsel is needed. Recognize legal issues — don't try to solve them by practicing law.

The Transfer on Death Deed

A properly prepared and recorded Transfer on Death Deed (TODD) lets a Texas owner name who will receive the property at death, while keeping control and the right to revoke during their lifetime. Property inherited at death may generally receive a basis tied to fair market value at the date of death under federal tax rules — a very different result from gifting property during life. Homeowners should discuss whether a TODD fits with qualified legal and tax professionals. How you transfer property matters.

Wills, trusts and other options

A will generally must go through probate to transfer property. Assets properly placed in a revocable living trust may pass without probate. Texas also offers procedures such as Muniment of Title and the Small Estate Affidavit in certain circumstances. The right procedure depends on the facts — and that determination belongs with an attorney.

Be careful with affidavits of heirship

An Affidavit of Heirship can help establish family history when someone dies without a will, supported by disinterested witnesses. But it isn't a magic document — completing one doesn't guarantee a title company or underwriter will insure the transaction. Talk to the title company before preparing one.

A disclaimer can create a bigger problem

An heir "giving up" an interest may cause it to pass under succession rules rather than to the family member everyone intended — sometimes bringing another generation, including minors, into the ownership chain. Four heirs can become eight or twelve. Agents should never advise on disclaimers; bring in the attorney and title company first.

Even the obituary can matter

Families often use "son," "daughter," "brother" or "sister" based on love rather than legal relationship. Underwriters deal with legal relationships, and may ask questions if an obituary names someone who doesn't appear in the heirship documentation.

Minor heirs can complicate a sale

A minor generally can't sign a deed the way an adult can. Court involvement or guardianship may be needed, affecting timeline and cost. Finding this before the property is under contract is far better than days before closing.

Probate is a generational-wealth issue

Across our communities, families lose valuable real estate because no plan existed. Taxes accumulate, properties deteriorate, heirs disagree, and investors approach families when they're vulnerable. I've advocated for financial institutions to explore Community Reinvestment Act funding to help low- and moderate-income families with the cost of clearing inherited property. Preserving wealth means helping families keep and transfer what they worked to acquire.

What real estate professionals can do today

1. Pull the deed early. Find out who actually owns the property.
2. Ask whether any owner is deceased.
3. Contact the title company early in the transaction.
4. Never give legal advice about probate, heirship, disclaimers, wills, trusts or guardianships. Refer to an attorney.
5. Coordinate with the title company before an Affidavit of Heirship is prepared.
6. Encourage estate planning while homeowners can make their own decisions.

Helping someone buy a property is only the beginning of generational wealth. The next question is: what happens to that property when they're gone?

This article is for educational purposes only and is not legal or tax advice. Estate, probate, heirship and tax matters should be reviewed with qualified legal and tax professionals.